Any advice is great - We have made a big decision - BANKRUPCY IS HERE....

Mike_St_Helens

Here goes, Right, My Partner and I have been chatting on here for a while and today after yet another surprise letter demanding money we have decided that our best and only option left is to claim Bankrupcy. We owned a pub that went bust, I wont go into the inns and outs but we were SH88T upon from a great height and were left with a great big mess.

Or current debt situation just gets worse and worse, It has now been confirmed with balances that we have unsecured debt of £99,252.48. We are beig sued by the brewery for £27500, We have today out of the blue recieved a final demand before legal proceedings from the tax man for tax when we had the pub of £258, they say a bailiff will be calling after 09/08/06 to remove goods. We also know the vat man will be here soon for around £300. and lastly around £2500 of council tac and business rates arrears (not inc this years)We spent thousands and thousands on that pub, it never worked or earned us any money.

We were going down the IVA route, but it was declined as we didnt have the 25% needed. The brewery debt is now at court and will be a CCJ in a few weeks. We have been in a DMP with payplan for 3 months, we NEVER have any spare money and are always scrimping. We surley cant do this to clear the best part of £130K.

Our only way out is to claim Bankrupcy, I hope that there are some experts, people who can comment and people who can offer any advice here to guide us though this.

Our Assets : Car Clio, Worth £3k (on HP with £4K outstanding-bad deal)
House, 2 Bed terrace, £73k Morgage, worth around £74-75K
Salaries, Me : £1100 per month, OH : £950 per month.

Our Debts : As above

Our SOA :

Mortgage £ 395.00
Council Tax £ 160.00 (inc arrears) (normal tax£80)
Building Insurance £ 22.00
Gas £ 40.00
Electricity £ 50.00
Water £ 25.00
Hire Purchase (1) £ 121.00
TV Licence £ 11.00
Telephone £ 35.00
Road Tax/MOT £ 15.00
Insurance £ 60.00
Petrol/Oil/Diesel £ 230.00 (work a long way away !)
Home Maintenance £ 30.00
Breakdown Cover £ 7.00
Food £ 320.00
Clothing/Footwear £ 40.00
Dentist/Prescriptions/Glasses £ 25.00 (athsma and contacts)
Pets £ 25.00 (cat and dog)

Total Outgoing : £1611

We currently pay Payplan £319 per month.

My plan is not to go bankrupt for 3 months, stop paying the car and payplan, leaves 500 ish per month, could then try save £2k so can buy a cheaper car (as I know the clio will go after bankrupcy) and to pay the Court fees for the 2 of us to go bust. Im not sure if i can do this.

• What will happen to the house?
• Can I still get a cheep 1k car and give the clio back?
• What shall I do abvout the council tax arrears?
• What shall I say to the Vat/Tax man for the time being?
• What shall I tell payplan?

Any advice at all will help us. We are a bit scared, unsure what will happen, but feel that this is the way forward. Im sorry my post is so long.

Mike x

Wonder_Girl

Mike_St_Helens wrote:

• What will happen to the house? It will be taken off you, sold and the money used to clear some of the debts
• Can I still get a cheep 1k car and give the clio back? the care will be taken back off you anyway as the HP or any shortfall will be included in the bankruptcy, your OR will not let you have a car over £1k in value
• What shall I do abvout the council tax arrears? you have to either pay these or set up an agreement with these to be paid back, tax of any kind can NOT be included in a bankruptcy, you will still have to pay these off
• What shall I say to the Vat/Tax man for the time being?as above
• What shall I tell payplan?that you have decided to go bankrupt, they won't stop you, you agreement you have with them is not binding

Anything else just gimmy a shout

Mike_St_Helens

Thanks for helping.

I was under the assumption that if we get someone to buy the 'interest' in the property for a nominal value(£1) we can keep the house ?

I know that the Clio would go, but if i did the £2k savings thing for 3 months, could I buy a car for £1k... I work 30 miles from home and work odd shifts so desparatley need a car for work.

Ok, so the coincil tax stays and needs to be paid, i have arrangements with these anyhow so thats not a problem.

What confuses me though, is why do the tax people and some councils make people bankrupt ? I assumed that it was part of the 'old debt'

Im worried about the 'saving' for 2 months thing, is this ok

and lastly, does anyone have avague idea what we would pay in income orders when bankrupt?

We arent taking this lightly, and are not doing it just to get out of jail for free etc etc....

Thanks again.

sanfrancisco

Wonder girl is great. I learn so much off her.

Hey Mike,

Bankruptcy sounds like the best option. It will be stressful, but just try to think that this time next year all this will be behind you.

Wonder_Girl

Mike_St_Helens wrote:

Thanks for helping.

I was under the assumption that if we get someone to buy the 'interest' in the property for a nominal value(£1) we can keep the house ?

I know that the Clio would go, but if i did the £2k savings thing for 3 months, could I buy a car for £1k... I work 30 miles from home and work odd shifts so desparatley need a car for work.

Ok, so the coincil tax stays and needs to be paid, i have arrangements with these anyhow so thats not a problem.

What confuses me though, is why do the tax people and some councils make people bankrupt ? I assumed that it was part of the 'old debt'

Im worried about the 'saving' for 2 months thing, is this ok

and lastly, does anyone have avague idea what we would pay in income orders when bankrupt?

We arent taking this lightly, and are not doing it just to get out of jail for free etc etc....

Thanks again.

No probs Mike, anytime.

That is only the case if you have negative equity, and you have actual equity, however if a relative wants to buy you out for market value and then “rent” to you this will be fine, but the money raised from the sale will go into the bankruptcy, and they have 5 years to do this, so although you don’t have much equity now you might do by the time they come to selling it.

You OR isn’t going to tell you that you can’t have a car, if you only want to buy a £1k car why do you need £2k?

I have never heard of a council making somebody bankrupt over taxes, they wouldn’t benefit and still need to be paid. They just send bailiffs.

Saving before you go bankrupt is fine, but you won’t be able to afterwards, and any savings you have when you go bankrupt will be taken off you.

Generally it’s whatever is left over £100, but this is done on a case by case basis and will be reviewed periodically.


WG x

Wonder_Girl

sanfrancisco wrote:

Wonder girl is great. I learn so much off her.

Aww what a lovely thing to say

Mike_St_Helens

Thanks WG - Im sorry to badger you with this..... You are a great helper !

When I was talking abt the mortgage etc, we also would have early repayment fees etc etc... I think its worth 74-75k, however most houses near us go for a lot lower and this is only an estimate.. We would be gutted to loose the home we have... gutted.

The 2k is for a car and for the court fees for 2 of us to go bankrupt.
Yeah, It was in the local paper that St Helens council made 5 people bankrupt !! I thought that it would be included, I know now... That doesnt bother me... Its the 99k and 27K debts that we have no chance in hell of clearing.

Thanks WG... We are truly gutted about all this, After the final straw this morning for yet another bill from that pub... I flew off the handle and we went to 'the pub' to talk... poss not the best thing, but at least we made a decision that has light at the end of the tunnell.

Mike
x

Wonder_Girl

Mike_St_Helens wrote:

Thanks WG - Im sorry to badger you with this..... You are a great helper !

When I was talking abt the mortgage etc, we also would have early repayment fees etc etc... I think its worth 74-75k, however most houses near us go for a lot lower and this is only an estimate.. We would be gutted to loose the home we have... gutted.

The 2k is for a car and for the court fees for 2 of us to go bankrupt.
Yeah, It was in the local paper that St Helens council made 5 people bankrupt !! I thought that it would be included, I know now... That doesnt bother me... Its the 99k and 27K debts that we have no chance in hell of clearing.

Thanks WG... We are truly gutted about all this, After the final straw this morning for yet another bill from that pub... I flew off the handle and we went to 'the pub' to talk... poss not the best thing, but at least we made a decision that has light at the end of the tunnell.

Mike
x

No probs at all hun, it’s not badgering at all, you need all the facts before you make a decision like this and that’s what we are here for

Besides I like to keep my thanked posts high

You wouldn’t be responsible for the fees, the OR would take care of those, but I am really sorry, it’s unlikely that you will get to keep the house, unless you have negative equity for the duration of the bankruptcy, but really your only option is to get a relative to buy you out in full and rent it to you for a few years until you can get another mortgage to take it back over.

Ah see that’s fine, yep go ahead and save that up!

Blimey I never heard that before, thank you I will look into that further!

As I say not a problem anytime hun, and don’t feel bad about this decision, it is the fresh start you both need.

WG x

MrsV

As I understand it, tax and council tax are included in bankruptcy.

If you want more information, go over to the discussion boards at https://www.fool.co.uk and have a look at the dealing with debt board, particularly posts by SON1C who has a lot of expertise in bankruptcy matters.

Good luck.

MrsV

Full information here; http://www.insolvency.gov.uk/bankruptcy/whatisbankruptcy.htm

and here; http://www.kronos.moonfruit.com/

hth

Mike_St_Helens

WG the fees i was relating to are the initial bankrupcy fees... dont you have to pay £300ish or so each to apply to be bankrupt.

The council tax thing is confusing me now......

I couldnt face having to rent somewhere when ive owned my own home since i was 20... so the OR has the full 5 years to just swipe the house from under you.... how long have you to 'pack your bags !'

Thanks for your support, as you say we arnt taking this easily....

Any ideas on our SOA and what the OR would want from us ?